By Tiernan Ray

Shares of Best Buy (BBY) today rose 35 cents, or 2%, to close at $18.75 following an upgrade by Jefferies & Co.’s Daniel Binder from Hold to Buy, with a $24 price target, up from $13, citing seven things he thinks could work for the stock.

Binder raised his fiscal 2014 estimates for the year ending next January to $2.37 billion in revenue and $2.35 per share in profit, up from $1.85 billion and $1.67, citing seven reasons to own the stock: better management, “clear cost-cutting opportunities,” low expectations for the first half of this year, potential “upside” for Q4, an improving “multi-channel experience,” the potential sale of its Europe and China operations, and “shifting investor sentiment” that may produce multiple expansion.

“Like other retail turnarounds we have seen, we are at the point in Best Buy’s turnaround story where we don’t have all the information we would like to understand the reinvention of Best Buy, but nonetheless we sense an inflection point,” writes Binder.

Binder is confident that “we will see management’s strategic plan evolve and questions around various issues should be answered, including questions about merchandising, real estate and international operations.”

The “modestly profitable” China operations may be jettisoned, he opines:

We think China and Europe will ultimately be sold, since these businesses lack a strategic fit for this predominantly domestic business and ROI is at unacceptable levels. We see a scenario where Best Buy’s assets in Europe and China could be divested and could generate something in the range of $600-900 million in proceeds or about 10-15% of the company’s market capitalization today. The wide range takes into account depressed profitability in China and a low but wide EBITDA multiple range.

Binder likes newly installed CEO Hubert Joly, and he likes the way Joly moved swiftly to “flatten” the management structure at the company and to cut costs:

President and CEO Hubert Joly has brought a wealth of customer service experience with him and took swift and decisive action early on in his tenure to eliminate management layers and reorganize the company’s main divisions. Thus far, we are pleased with the results we have seen from the company’s strategic plan. We have seen significant action taken on the company’s plans to cut SG&A, with $150 million of the planned $400 million SG&A cuts realized in 4Q. Furthermore, we have seen the management team stabilize sales and defend against gross margin pressures, all while handling additional responsibilities related to Richard Schulze’s buyout process.

Note that DealReporter staff this afternoon wrote that founder Richard Schulze, who some have speculated might try to buy out the company, is now rumored to be considering selling his stake, according to multiple unnamed sources.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.